Question: Calculating ROI. For fiscal year 2017, LaundryMate Products had income as follows:
Sales $55,000,000
Less: COGS $38,400,000
Less: selling & admin expenses $5,700,000
Less: Interest expense $1,000,000
Income before taxes $9,900,000
Less: Income taxes $3,465,000
Net Income $6,435,000
Total assets were $97,000,000, and noninterest-bearing current liabilities were $3,200,000. The company has a required rate of return on invested capital equal to 10 percent.
Calculate NOPAT, invest capital, and ROI, and comment on the company's profitability.